Levine Won't Buy Israel Bonds, and Both Sides Read It as a Political Earthquake
New York City Comptroller Mark Levine told The New York Times in an interview published Wednesday, Oct. 14, that he will not reinvest city funds in Israeli government bonds, abandoning a pledge he made to Jewish voters during his successful 2025 campaign. The reversal came in his 10th month in office. The Times broke the story, and the New York Post, Times of Israel, the Forward, JNS, JTA, NY1 and Jewish Insider followed.
Levine framed the decision as strictly financial. "I always said this would be based on financial considerations only, not politics — that's still my position," he told the Times. "But as of now, we feel that because of some technical challenges, and because of financial considerations, that this is not an investment that we can make right now." He said he struggled with the choice personally and is "heartbroken at the state of politics in the country right now."
His investment team cited lower sovereign credit ratings, technical trading and custody challenges, instability tied to the wars in Gaza and Iran, and the office's preference for shorter-term holdings. Fitch lowered its outlook on Israel from stable to negative in April 2024 and has not upgraded it since. S&P Global and Moody's downgraded Israel during the war and later moved their outlooks from negative back to stable, but their technical ratings remain below early-2023 levels; S&P affirmed Israel at A/A-1 with a stable outlook in May. Israel bonds have returned roughly 5% on two- and three-year maturities, which Levine indicated lags the pension system's recent performance.
The city had held Israeli bonds since the 1970s, for nearly five decades, with holdings that reached almost $40 million. Brad Lander, comptroller from 2022, declined to renew bonds that matured in 2023, wiping out the position for the first time in half a century. Levine campaigned in 2025 on restoring it, telling a June 2025 Democratic debate that a globally diversified portfolio "should include investments in Israel and Israel bonds, which have paid solid dividends for 75 years." In April he called them a safe investment, saying they had never missed a payment in 70 years and "pay excellent interest."
Mayor Zohran Mamdani welcomed the decision. "I don't believe that our city should purchase Israel bonds," he said. "We don't purchase the bonds of any other sovereign nation. I don't think that we should make an exception when it comes to Israel." Lander, now a congressional candidate, agreed, arguing the pension funds carry no other foreign sovereign debt and that past comptrollers' purchases were a political move rather than a fiduciary one. But former comptroller Scott Stringer, who ran for mayor last year, called it "a major victory for BDS" with "long-term ramifications" that "will, unfortunately, spark more BDS calls that could cause further antisemitism."
William Daroff, CEO of the Conference of Presidents of Major American Jewish Organizations, told JNS the decision is "indefensible and repudiates the clear commitment he made to voters." Former state assemblyman Dov Hikind called Levine "a perfect example of a coward." Financier Jeffrey Wiesenfeld, a former CUNY trustee who promotes Israel bonds, said he was "grievously disappointed," noting that New York State and Palm Beach County alone hold $1 billion of them. Peter Sterne of City & State New York wrote that "policy-wise, this isn't surprising" — the city buys no foreign government bonds — "but politically, it's an earthquake."
Nathan Miller, a spokesperson for the Development Corporation for Israel, which brokers the debt as Israel Bonds, pointed to Israel's economic growth and tech sector and quoted Levine's own past description of the bonds as "a long-term safe and secure investment," adding: "That remains true." CEO Dani Naveh told JNS in July that talks with Levine were ongoing and that purchases have more than doubled since the Oct. 7, 2023 attacks. Daroff said Israel has never missed a principal or interest payment since the bonds began in 1951, with investors buying more than $8.5 billion since Oct. 7, 2023. The Knesset approved the first issue in February 1951; it raised $35 million at a Madison Square Garden launch and closed the year above $52 million, against a $25 million projection.
New York State is a different story: the pension system run by state Comptroller Thomas DiNapoli still holds more than $360 million in Israel Bonds, and he recently won a decisive primary against candidates who backed divestment. City pension systems separately hold $285.42 million in Israel-based public equities and fixed income, according to Levine's office, with reports of about $300 million in Israeli equities and a smaller Israeli real estate position. Levine oversees five public pension funds with more than $326 billion in assets but has unilateral discretion over only about $1.3 billion — the "cash desk" pool past comptrollers used to buy the bonds directly, and the reason he could make and break the promise without sign-off from the union-linked boards. His office says the analysis is ongoing; he has given no timetable for a return.